FAQ | Payment Terms

Home > FAQ > Payment Terms

What payment terms?

Items

Terms

Cunrrency USD $ / EUR €
Tooling & Samples T/T 100% in davance
Mass Production

30%-50% in advance, balance against to the B/L if ship by sea.

If ship by air, the balance need pay before delivery

What pricing terms usually used?

Terms

Comments

FOB

"Free On Board", is a term in international commercial law specifying at what point respective obligations, costs, and risk involved in the delivery of goods shift from the seller to the buyer under the Incoterms 2010 standard published by the International Chamber of Commerce. FOB is only used in non-containerized sea freight or inland waterway transport. As with all Incoterms, FOB does not define the point at which ownership of the goods is transferred.

The term FOB is also used in modern domestic shipping within the United States to describe the point at which a seller is no longer responsible for shipping cost.

Ownership of a cargo is independent from Incoterms. In international trade, ownership of the cargo is defined by the bill of lading or waybill.
CIF The CIF term refers to the cost plus insurance premium plus freight. (Designated port of destination, the original text is Cost, Insurance and Freight (insert named port of destination) is traded according to this term. The constituent factors of the price include the port of shipment to the agreed destination. The usual freight and agreed insurance premiums in Hong Kong, the seller must have the same obligations as the CFR terminology, but also handle the cargo insurance for the buyer and pay the insurance premium. According to the general international trade practice, the insurance amount insured by the seller should be based on the CIF price. If the buyer and the seller have not agreed on the specific risk, the seller only needs to obtain the insurance coverage at the lowest limit. If the buyer requests insurance for war insurance, the seller should be insured under the premise that the insurance premium is borne by the buyer. When the seller is insured, if he can do it, he must be insured in the contract currency.
EXW EXW (Ex Works) is one of the international trade terms. It means that when the seller delivers the goods to the buyer at its location or at another designated place (such as a factory, factory or warehouse), the delivery is completed and the seller does not handle the export clearance. Procedure or load the goods on any means of transport. This term is the term that the seller bears the least responsibility. The buyer must bear the full cost and risk of receiving the goods at the seller's location. However, if both parties wish to be responsible for loading the goods and bear the full cost and risk of loading the goods at the time of shipment, they must be clearly stated in the sales contract. The term should not be used when the buyer cannot directly or indirectly handle the export formalities, but should use the FCA if the seller agrees to load the goods and bear the costs and risks.